Turkey’s Cenbank raises mandatory conversion rate of foreign exchange earnings for exporters to 40%

ISTANBUL, April 15 (Reuters)Turkey’s central bank said on Friday it had raised the share of foreign currency earnings that exporters are required to sell to the central bank from 25% to 40%, a move intended to bolster the country’s foreign exchange reserves.

In January, the government asked exporters to sell 25% of their foreign exchange earnings to the central bank, which is seeking to replenish its reserves depleted during a currency crisis late last year.

On Monday, Reuters reported that authorities were considering raising the threshold to 50% although no decision was made at the time.

The central bank’s net foreign currency fell to a record low of $7.55 billion in January, mainly due to market interventions to support the falling lira. They have since risen, hitting $18.30 billion last week, and Turkish authorities are looking to export earnings to further replenish them.

Turkey’s exports totaled $225 billion in 2021 and the government and economists predict they will reach $250 billion this year.

The central bank also said export earnings to Russia and Ukraine can be submitted in Turkish lira, even if they were initially disclosed as foreign currencies.

(Reporting by Ebru Tuncay Writing by Ezgi Erkoyun Editing by Tomasz Janowski)

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